NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, August 29, 2017

The World Bank’s International Finance Corp. and European asset manager Amundi SA are targeting year-end to raise $2 billion for what is expected to be the world’s largest green-bond fund dedicated to emerging markets.

The fund aims to marry the goals of investors seeking more high-yield opportunities and development banks seeking to expand the green economy in emerging markets. Initially, only 10 to 12 percent of capital in the Amundi-IFC fund will be invested in green bonds, said Fred Samama, deputy global head of institutional and sovereign clients at Amundi, in an interview.

Lenders such as the World Bank are eager to see the market for environmentally-friendly securities grow faster to help reach global climate goals. The entire green bond market is projected to surge more than 30 percent this year to a record $131 billion, according to Bloomberg New Energy Finance, still just about 0.2 percent of the total bond market.

Photo courtesy of Ron Kroetz.